IOC Q4 profit dips 60%, to invest Rs 50,000 cr

Indian Oil Corporation (IOC) has reported a net profit of Rs 1609.67 crore for the fourth quarter of the financial year 2006-07, down 60.06 per cent from the corresponding period last year. The company had recorded a net profit of Rs 4030.57 crore for the last quarter of financial year 2005-06.

“Currently, we have under-recoveries of Rs 6.13 per litre on petrol, Rs 3.76 per litre on diesel, Rs 14.67 per litre on kerosene, and Rs 167.14 per cylinder on LPG,” pointed out S Behuria, chairman of IOC, explaining the reasons for the dip in performance.

However, for the whole-year ended March 31, 2007, the company registered a net profit of Rs 7,499.47 crore, up 52.57 per cent from Rs 4,915.20 crore in the previous year.

The board of the company has recommended a final dividend of 130 per cent (Rs 1,550 crore), which is in addition to the interim dividend of 60 per cent (Rs 701 crore) declared in December 2006. The total dividend payout for the financial year 2006-07 thus stood at Rs 2,251 crore, while the company’s earnings per share stood at Rs 62.90 as against Rs 42.08 in the previous year.

The company has earned a total income of Rs 2,02,692.71 crore for the year ended March 31, 2007, up 24.5 per cent from Rs 1,62,798.16 in the previous year.

“Since the previous year’s results do not include the contribution of IBP, whose amalgamation with the company was approved by the Ministry of Company Affairs in April 2007, results are not comparable with those in the last year,” opined an analyst with a domestic brokerage.

Behuria said that the company is keen on acquiring 20,000 to 30,000 hectares of land in Madhya Pradesh and Chattisgarh for Jetropha cultivation. He said the company would spend around Rs 5,500 in 2007-08 towards capital expenditure to fund its expansion plans.

The company said it is losing Rs 2,500 crore every month on selling petrol, diesel, LPG and kerosene below the imported cost."We are currently losing Rs 6.13 a litre on petrol, Rs 3.76 per litre on diesel, Rs 14.67 a litre on kerosene and Rs 167.14 per LPG cylinder," Behuria said.

The government has not allowed public sector firms like IOC, Bharat Petroleum and Hindustan Petroleum to raise fuel prices in line with rise in international crude oil prices.

"We are losing about Rs 80-85 crore a day on fuel sales," he said, hoping the burden sharing scheme involving upstream firms like ONGC bearing a part of the under-realisation and government issuing oil bonds will continue this fiscal.

He, however, did not say if IOC and other public sector firms will press the government for increasing retail prices.

The total under realisation on fuel sale in the full 2007-08 fiscal is estimated at Rs 50,400 crore. Government compensates a third of the losses by giving fuel retailing oil bonds. ONGC, GAIL and Oil India Ltd share a similar amount and the rest is borne by the refiners.